Arguably one of the most controversial and challenging of the formal legal requirements of a valid Will is whether or not the person making the Will has sufficient testamentary capacity at such time that they make their Will. A Will is not valid unless the person making it has testamentary capacity. That is, they must:
(a) understand the nature of the act and its effects;
(b) understand the extent of the property of which he or she is disposing; and
(c) be able to comprehend and appreciate the claims on his or her Estate to which he or she ought to give effect.
However, what happens if a person has no Will and no longer has the required testamentary capacity?
One option of course is that no steps are taken. In this case, when that person dies his or her Estate will be distributed in accordance with a prescribed formula set out in the Administration Act (“an Intestacy”). But, what if dividing this person’s Estate or an Intestacy does not adequately provide for certain family members or non-family persons or organisations? Further, what if the person already has a Will in place but their personal and/or financial circumstances have significantly changed since the time when the earlier Will was made and it is now no longer relevant or appropriate?
This issue arises more and more frequently as our population ages, people’s financial circumstances become more complex, and the family unit continues to disappear.
In this situation, consideration can be given to whether an application should be made to the Court for what is called a Statutory Will. This is a Will which is made by the Court for the person concerned. This option first became available in Western Australia in 2008.
Upon such an application being made by any person, the Court, pursuant to section 40(1) of the Wills Act 1970 (WA) has the power to make, alter, or revoke a Will of a person who lacks testamentary capacity provided that the person concerned:
(a) lacks testamentary capacity;
(b) is alive; and
(c) is over 18 years of age.
The power for the Court to make a Statutory Will enables the Court to ensure that there is a valid Will in place which:
- Gives effect to the previously stated or more obvious wishes of a person lacking testamentary capacity;
- Avoids a full or partial intestacy;
- Avoids a future dispute as to the adequacy of provision or interpretation of an existing testamentary document;
- May allow for appropriate structuring to be put in place, such as testamentary trusts, which can have significant benefits for beneficiaries of the Estate; and
- Deals with changes in circumstances that may have occurred since a last Will was made by the Will maker.
However, in the last 10 years there is only one reported case in Western Australia which has addressed this matter. In that instance the Court declined to make the Will as sought. The lack of applications to the Court for a Statutory Will may reflect a lack of familiarity with such applications, or that the cost and complexity of these Applications can be prohibitive in many instances. Nevertheless, Statutory Wills can be a useful estate planning tool that should, at the very least, be considered in the appropriate circumstances.
Please contact Alana Stallard at [email protected] if you wish to discuss this matter or your estate planning objectives further.